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Imperial Oil continues existing share repurchase program
| Calgary, AB,
June 21, 2006
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Imperial Oil Limited today announced it has received final acceptance from the
Toronto Stock Exchange for a new normal course issuer bid to continue its
existing share repurchase program facility that will expire on June 22, 2006.
The new program enables the company to repurchase up to five percent of its
currently 975,449,328 outstanding common shares, or a maximum of 48,772,466
shares during the next 12 months (on a post share split basis). That total
will include shares purchased for the company's employee savings plan and
employee retirement plan. Shares purchased under the normal course issuer bid
are cancelled.
The new program will begin on June 23, 2006,
and will end when the company has purchased the maximum allowable number of
shares, unless it provides earlier notice of termination. If not previously
terminated, the program will end on June 22, 2007. All share purchases will be
made through the Toronto Stock Exchange.
Exxon Mobil
Corporation has advised Imperial that it will participate in the new program,
as it has in the existing one, to maintain its ownership percentage in
Imperial at 69.6 percent. ExxonMobil said it will review its participation
from time to time and inform Imperial of any change in its intentions.
From time to time Imperial expects to have cash in excess of its day-to-day
operating and capital investment needs. After considering alternative means of
distributing excess cash to shareholders, the board of directors of Imperial
has concluded that it would be in the best interests of Imperial and its
shareholders to proceed with the normal course issuer bid. It is a flexible
and reasonable way of rebalancing Imperial's capital structure while
distributing a portion of its cash reserves to shareholders who choose to
participate by selling their shares. ExxonMobil's participation in the normal
course issuer bid will permit ExxonMobil to maintain (rather than increase)
its current percentage ownership level of shares.
In
addition, Imperial introduced a stock option plan in 2002 for selected
directors and key employees. Since there could be a dilution in the percentage
ownership levels of shareholders that would result from the issue of shares on
the exercise of stock options, Imperial considers that it would be in the best
interests of Imperial and its shareholders to proceed with the normal course
issuer bid in order to reduce or eliminate such dilution. The company has no
plans to issue stock options in the future.
Share repurchases
under the existing program had reached
50.2 million shares (on a post
share split basis) at a total cost of about $1.9 billion by June 20, 2006,
representing an average cost of $38.52 per share. The maximum allowable number
of shares that could be acquired under the program was about 51.2 million (on
a post share split basis), including shares purchased for the employee savings
plan and retirement plan.
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